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Zach Space’s bait and switch on health care reform

Zach Space talks a good game. He knows how to say what he thinks voters want to hear. The problem is that his votes don’t line up and his rhetoric is slippery.

A perfect example is health care reform legislation. Here is Space on why he supports the Democrat proposals:

And the Ohio Democrat now supports the health care reform bill passed out of the Energy and Commerce Committee. But he said he could change his mind if key components fought for by him and fellow “blue dog” Democrats – fiscally-conservative members of the party – are later stripped from the legislation.

There are multiple bills in Congress pertaining to health care, and these will ultimately be combined into one measure for members to decide, he noted. Among the ideas being discussed is the creation of a government-run public insurance plan that would compete with private insurers.

“There are some that want socialized medicine,” he said. “I’m not one of them. That’s a mistake. Then there are some who want us to do nothing.

“This public plan is not socialized medicine. It is an attempt to keep insurance companies honest and to provide honest competition,” he said.

This is a giant bait and switch on multiple levels. First, the idea that Republicans – “some people” – want to do nothing is a red herring. There are all sorts of GOP proposals to make health care and health insurance better.

But this is the typically deceptive language Democrats use. We want to help while the GOP wants to do nothing (It is also the mindset that doing something – no matter how damaging – is always better than doing nothing).

It also appears to be moderate by pretending the choice is between direct socialized medicine (Canada, etc.) and doing nothing when it is a choice about which direction to go: more government control and involvement or a consumer/patient driven system.The competition aspect is likewise a bait and switch. The public often likes this idea since they don’t trust insurance companies. But the problem is in how this type of system works out in real life. When the government competes with business it brings a whole series of advantages that result in it crowding out businesses.

Government doesn’t have to make a profit or go out of business when they fail. Government makes the rules and holds the leverage on enforcement. And those that want a single payer type system have every incentive to slowly transition from “competition” to government control. So government doesn’t so much compete with business as undermine it.

If you wanted real competition you would seek ways to get as many companies involved in the market as possible and offer as much flexibility as possible. In this way you would have lots of plans and lots of price points. People could then choose and those companies that were the best at offering what people wanted and delivering on those promises would win out.

And in fact, Space knows this because he applied very similar analysis to hospitals in his region:

Initially, reimbursement rates under the public plan would have been the same for providers as those currently under Medicare, he said.

“While that sounds good, it was not good for our local hospitals,” Space added. “I will tell you that between 60 to 70 percent of everyone who walks in the door is either a Medicare or Medicaid recipient, and they’re losing money on them.

“They’re making up margins on the roughly 20 percent of privately insured cases,” he said. “If that shrinks to 10 percent as folks are crowded into the public plan, small hospitals can’t make their margins and we lose some of them. That was one of the lines in the sand I couldn’t cross.”

Now why would folks be crowed into the public plan? Why is this an issue if it is only competition? Because Space knows that mandated policies combined with a public option means businesses are going to have incentives to stop offering coverage to their workers and instead force them on to the public plan.

So Space is playing word games. The government isn’t just another competitor in the market. It has an unfair advantage and distorts the market in fundamental ways. He knows this because that distortion hurts hospitals.

And he notes that Medicare basically forces people to pay higher rates to subsidize others. So why would he think pushing more and more people onto a Medicare type system is going to do anything but acerbate this problem? Does he really think allowing for negotiable rates solves it? I doubt it.

No, what Space and the Democrats are trying to do is give the government a great deal of leverage but stop short of a total takeover. They cover this moves with lots of rhetoric about keeping insurance companies honest and “it’s just competition.” But in the end the government holds all the cards and the dynamics are going to push us toward public control. This was in fact the “lesson” of Hillary Clinton’s failure. Move slowly toward more and more government.

It is only the arrogance of Obama that has made this current push possible. Obama thought the power of his personality and popularity alone could carry the day. But reality is forcing the Democrats back toward an incremental strategy.

And Space is doing his part to take us down that path. He talks like a Blue Dog but acts like a soldier for Nancy Pelosi. Don’t buy his bait and switch.